Illinoisans pay the fourth-highest wireless taxes in the country

Illinoisans already pay the nation’s fourth-highest wireless taxes. But a new bill awaiting Gov. Bruce Rauner’s signature would make this burden even heavier.

Illinoisans pay the fourth-highest wireless taxes in the country, according to research from the nonpartisan Tax Foundation. A typical Illinois household with four wireless phones paying $100 per month for wireless service pays more than $290 each year in taxes and fees levied at the local, state, and federal levels.

But those payments would become even higher under a new bill Illinois lawmakers sent to the governor’s desk May 31.

Senate Bill 1839 would increase 911 fees for the state to $1.50 from $0.87, and would allow Chicago to increase its 911 fees to $5 per month per line from $3.90.

The Illinois House passed SB 1839 May 31 on a 81-27-2 vote. More than half of House Republicans voted in favor of the bill, and only 10 Democrats voted against it. The Senate passed the bill on a concurrence vote with near-unanimous approval shortly after.

The bill now awaits Gov. Bruce Rauner’s signature.

With the combination of federal, state and local wireless taxes and fees, Illinoisans shoulder a nearly 25 percent tax burden on their wireless bills. In addition to 911 fees, Illinois levies a state telecommunications tax of 7 percent, which municipalities other than Chicago can also levy at rates of up to 6 percent. Chicago tacks on an additional 7 percent telecommunications tax at the city level.

Illinois is one of only three states and Washington, D.C. to levy taxes on wireless service at higher state tax rates in lieu of the broad sales taxes that apply to most other purchases. Only Illinois and Florida levy state-level telecommunications taxes with local add-ons.

Americans – especially those in low-income households ­– increasingly rely on wireless service as their sole means of communication and connectivity. More than 60 percent of Illinois households are wireless-only.

And while Illinois’ wireless taxes are high in general, Chicago’s are even higher. Chicago’s wireless taxes and fees were the highest of any city the Tax Foundation studied, by far. A typical Chicago household with four wireless phones paying $100 per month for wireless voice service pays nearly $435 each year in taxes and fees. This amounts to a 36 percent tax burden on Chicagoans’ wireless bills. Under some payment plans, a Chicagoan can pay more in taxes on an additional line than on the line itself.